EU supports the efficient enforcement of the competition law and policy in the Republic of Moldova

The EU-funded project “Support for structured policy dialogue, coordination of the implementation of the Association Agreement and enhancement of the legal approximation process in the Republic of Moldova” continued with series of tailored made round tables in close cooperation with the Competition Council having in mind the importance of the Competition Law and Policy both with regard to competitiveness of the national economy as well as with regard to the accession process.

Republic of Moldova achieved the EU candidate status in June 2022 and the level of legal approximation and especially its implementation shall not be the subject of the (pre)accession negotiations only, but also a very important element even before in the expected screening process and may have an influential effect on determination of the related benchmarks, especially in Chapter 8, covering Competition and State Aid.

The workshop on economic and legal assessment of mergers that was held on 13 December 2022 provided detailed elaboration on different aspects of merger review inter alia with specific focus on economic and legal thresholds that must be considered when reviewing different types of concentrations of undertakings on the market. This specific workshop was in fact a continuation of the topic that was presented on 27 October, dealing with economic and structural indicators. Detailed elaboration of economic and structural indicators is one of the key objectives of the market understanding in both, Antitrust (detecting collusive practices and abusive behaviour) as well as merger control.

The workshop held on 13 December 2022 provided a comprehensive view on different types of legal thresholds, especially regarding de facto taking over the decisive influence and thus ability to decide about competitive parameters of the “target” undertakings on the market.

A special part of the workshop was dedicated to remedies in case of mergers that may represent a competition concern as well as the role of trustees in such cases. Non-transparent ownership of the companies intending/exercising control over the target companies represents a specific challenge in merger review, nevertheless there is no clear answer to this demanding open issue if there is no possibility of extensive cooperation with other institutions that have relevant information about market activities, like e.g., Securities Market Agency, etc.

The workshop also provided a detailed elaboration of different “landmark” merger cases to present specific challenges in identifying relevant market, test to be applied in determination the “significant lessening of competition” as well as elements for prohibition of intended mergers as well as identifying the elements for approval of the mergers that may “at first glance” seem to be critical regarding potential competition concerns.

Economic and structural indicators are also inevitable element when detecting collusive practices, usually described as restrictive agreements; such agreements aiming in price fixing and market sharing are known as hard-core cartels. A special and most harmful form of collusive practices is bid rigging, known also as collusive tendering.

The roundtable which was focused on detailed elaboration of bid rigging (collusive tendering) was realised on 15 December 2022, attended by representatives from the Competition Council and other institutions that are also in charge of detecting and prohibiting such unlawful practices. 

Bid rigging as a particular form of collusive price-fixing behaviour by which firms coordinate their bids on procurement or project contracts, is a specific infringement that appears in the (public) procurement practices and represents not only the breach of the competition laws, but also other connected legislation, especially the one dealing with public procurement as well as with corruption.

The roundtable discussion highlighted the most challenging issues connected with public procurement. Although public procurement is understood to grant efficient use of public funds and represents an open door for competition on the market, on the other public procurement represents a playground for collusive and corruption practices. All these elements were elaborated in detail.

The all roundtables and workshops realised by the project in close cooperation with the Competition Council in October and December 2022 were very well attended by the Competition Council staff and Plenum as well as with representatives from other institutions. These training process may be further developed with specific training on Competition Law and Policy and its enforcement for other important stakeholders, the judiciary, business society, sector regulators etc., as the level of the competition culture depends on all, the enforcers as well as the market participants.

The EU-funded project “Support for structured policy dialogue, coordination of the implementation of the Association Agreement and enhancement of the legal approximation process in the Republic of Moldova” aims at increasing the capacities of the Moldovan Government and other key national institutions in implementing the EU-Republic of Moldova Association Agreement.